(Government Emergency Ordinance No. 8 / 2014, published in the Official Gazette No. 151 on 28 February 2014)

The Ordinance brings amendments and completions to several normative acts, including the Fiscal Code and the Fiscal Procedure Code.

These amendments become effective upon their publication in the Romanian Official Gazette with certain exceptions.

Among the most important changes, we mention the following:

Fiscal Procedure Code

The fiscal secret

The change entitles any applicant which has the written consent of the taxpayer, to receive information related to taxes, fees, contributions and other amounts owed by the respective taxpayer to the general consolidated budget.

Means of evidence

The definition of the proof (as being any element which serves to ascertain a fiscal state of fact) and performing current, operative and unexpected checks and thematic inspections as new means of evidence that the tax authorities may use in order to determining the fiscal state of fact.

Reporting obligations for residents of other EU member states

The ordinance provides that payers of labour income, administrators’ fees, life insurance products not covered by EU legal instruments and pensions are required to file a return regarding the income paid to each beneficiary which is resident of other EU member states by the last day of February of the current year, for the previous year.

In addition, taxpayers which are residents of other EU member states and which derive income from immovable properties situated in Romania are required to file a return regarding the realised income by 25 May of the current year for the previous year.

Moreover, residents of other EU Member States are required to submit the tax return regarding immovable properties acquired in Romania, as stipulated and within the deadlines provided by the Fiscal Code.

The form and the content of the above-mentioned tax returns will be approved through an order issued by the National Agency for Fiscal Administration (and the Ministry of Regional Development and Public Administration for the last above-mentioned form).

Certification of tax returns

Taxpayers may opt for the certification of the tax returns, including the rectifying tax returns, by a tax consultant registered as an active member in the tax consultants and tax consulting firms Registry.

The certification of the tax returns represents an evaluation criterion for the risk assessment performed by the tax authorities for the purpose of selecting the taxpayers for tax audits.

Anti-fraud control

A new article was introduced in respect of the procedure for carrying out the anti-fraud control, represented by the operative and unplanned control, introduced through this ordinance. This type of control is performed by anti-fraud inspectors.

Selection of taxpayers for tax audit

Explanations were introduced in respect of the procedure for selecting the taxpayers which will be subject to a tax audit. This selection will be conducted according to the risk level established as a result of the risk analysis.

Settlement of tax liabilities

The ordinance introduces provisions for amending one of the chargeability moments of tax claims for compensation purposes from the date when the refund application was submitted to the date when the refund right arises for the recoverable amounts. The date when the refund right arises is represented, among others, by:

• the payment date for the amounts paid in excess of the tax liabilities due;
• the date of filing of the annual profits tax return in case of refundable profits tax resulting from the annual regularization, etc.

VAT reimbursement

New provisions were introduced in respect of the VAT reimbursement.

According to the new provisions, the tax authorities approve the VAT reimbursement without performing a tax audit in case the value of the amount requested for reimbursement is lower than RON 45,000, on condition that a subsequent tax audit is performed.

The refund of taxes withheld at source

Special provisions were introduced regarding the refund of the taxes withheld at source.

It is stipulated that the refund of the withholding tax paid in excess to the legal obligation is performed by the income payer at the request of the taxpayer, within the statute of limitation period.

In addition, it is mentioned that in case the tax residency certificate is made available after the tax was withheld by the income payer, the tax refund will be performed even if the tax period when the refunded tax liability was due had already been subject to a tax audit.

In addition, it is stipulated that the income payer does not have the obligation to submit rectifying tax returns for the settled amounts. Still, the ordinance stipulates the obligation to correct the informative declarations corresponding to the regularization performed.

Interest

Starting with 1 March 2014, the interest level was reduced from 0.04% to 0.03% per each day of delay.

Taxpayer receivables

Provisions were introduced according to which the taxpayer is entitled to late payment interest for the receivables resulting from the cancellation of a tax administrative act, which imposed tax liabilities that were previously cancelled. In this case, the late payment interest run from the day when the tax liabilities established through the tax administrative act were paid until the day of the refund or compensation of the taxpayer’s receivable resulting from the cancellation of the tax administrative act.

Enforcement by garnishment

The garnishment of the debtor’s bank accounts is no longer to be executed at the same time as when the subpoena and the executory title are sent, but only after a 30 days term from the date when the subpoena is communicated.

The settlement of the appeals

The threshold for delimitation of the competency for settelment of apeals between the central and regional levels was increased from RON 3 million to RON 5 million.

Government Emergency Ordinance no. 29/2011 regarding the granting of scheduled payments

The interest rate is reduced from 0.03% to 0.02% per each day of delay in case of taxpayers, which constitute the entire warranty as a bank guarantee and / or record of monetary funds at a State Treasury unit.

(P) Tax Flash: Amendments brought to Fiscal Code

For additional information, please contact:

Venkatesh Srinivasan, Partner – Head of Tax and Legal

Ernst & Young SRL and E. Platis, C. Bazilescu LLLP

15-17 Ion Mihalache Blvd.

Bucharest Tower Center Building, 22nd Floor

Sector 1, 011171, Bucharest, Romania

Tel: (40-21) 402 4000, Fax: (40-21) 310 7124

Email: office@ro.ey.com

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